Patna High Court
Shree Sheo Shakti Re-Rolling Mills (P.) ... vs State Of Bihar And Ors. on 2 January, 2002
Equivalent citations: 2002(1)BLJR318
Author: S.K. Katriar
Bench: S.K. Katriar
JUDGMENT S.K. Katriar, J.
1. This writ petition has been preferred with the prayer to quash letter No. 1763, dated 11-7-2001 (Annexure-19), issued under the signature of the Director of Industries Government of Bihar, enclosing thereto the resolution dated 20-6-2001 of the State-level Industrial Subsidy Committee (hereinafter referred to as 'the Committee'), considered at its meeting on 14-6-2001, informing the petitioner in substance that its claim to the balance of the industrial subsidy has been rejected.
2. The meandering course of this seemingly interminable litigation is sickening. Claim of industrial subsidy of Rs. 7.5 lakh as per the policy of the State Government has brought the petitioner to this Court for the fifth time provided the present one is allowed to be the last one. My mind boggles down as to how to look at the matter before me The hair-spliting approach adopted with the purpose to harass the petitioner, and to defeat the policy of industrial subsidy, is writ large on the face of it. With such an approach, every individual in this State shall ultimately suffer including the perpetrators of such a course. Industrial subsidy is a voluntary act of the State Government, meant to give a fillip to production and generate employment opportunities, but has on account of the harassing approach of the functionaries of the State Government instead become a depressant. If the State Government is unable to administer it in the spirit it was conceived, the policy of granting industrial subsidy should be abolished, or else the persons responsible for administering the same should be taken to task.
3. A brief resume of the five writ petitioners is essential. For rapid growth of industries in this State, the Government of Bihar in the Department of Industries issues its resolution incorporating the Industrial Incentive Policy, 1993 (hereinafter referred to as 'the Policy'), whereby new small scale industrial units coming into production between 1-4-1993 and 31-3-1998 having an investment up to a maximum of Rs. 60 lacs on plant and machinery and ancillary industrial unit with an investment up to a maximum of Rs. 75 lakh on plant and machinery, shall be entitled for a capital subsidy up to 15% on the investment on plant and machinery till the date of production. It was to apply to a large number of districts of the State of Bihar including the district of Aurangabad as per paragraphs-5 of the Policy. Paragraph-7 of the Policy provides that industrial units coming into production between 1-4-1993 and 31-3-1998 (with investment up to Rs. 15 crore on machinery & plants) will get 25% subsidy on purchase and installation of Diesel Generating sets. However, maximum limit of the subsidy for this purpose is Rs. 7.50 lakh. If any industrial unit which has not availed of the subsidy for the purchase of Diesel Generating sets, shall be entitled for prescribed subsidy for the purchase of Diesel Generating sets after expansion or diversion. I am informed at the Bar that the amount of industrial subsidy is not handed over to the investor, but is given directly to the investor's lending institution, Bihar State Financial Corporation (respondent No. 5) in the present case. In view of the promise held out by the State Government, the petitioner set up an industrial unit for manufacturing M.S. Road and Angles in the district of Aurangabad after taking loan from respondent No. 5. The petitioner made heavy investment over purchase and installation of plant and machinery, maintenance equipment, and the civil structure to cover and protect the same. The petitioner-Company commenced trial production on 1-1-1995, and went into commercial production on 10-4-1995. The quantum of investment has been the subject-matter of the protracted litigation between the parties and shall be discussed at the appropriate stage. As is obvious on the very face of the Policy, the quantification of industrial subsidy admissible to the petitioner would be calculated after the amount of investment on plaints and machineries and ancillary industrial units is determined as per the Policy is determined.
4. After the petitioner's unit commenced commercial production, it applied for release of a sum of Rs. 7.5 lacs by way of subsidy, in the present case, setting up the unit, the period during which the investment was made, the amounts and the items of investment, the date of commencement of commercial production, etc. have never been in dispute. Only two items have had been in dispute, one was whether the investment up to the date of trial production or the commercial production has to be taken into account, which was finally adjudicated by this Court by order dated 12-3-1999 (Annexure-13), passed on CWJC No. 1191 of 1998. The second item of controversy has been the determination or identification of the items of investment on plant and machineries within the meaning of the Policy for calculating the admissible amount of industrial subsidy. No action was taken on the petitioner's application for a long time necessitating the first writ petition, namely, CWJC No. 11649 of 1996, which was disposed of by a learned Single Judge on 10-4-1997 (Annexure-4), whereby the writ petition was allowed and the State of Bihar was directed to place the case of the petitioner before the State Level Committee and to make payment of subsidy within a period of two months from the date of the order found admissible.
5. Accordingly, the Director of Industries, Government of Bihar (respondent No. 3), addressed his letter dated 15-5-1997 (Annexure-5), to respondent No. 5 calling for a report on the condition of the unit after inspecting the same and examining the petitioner's claim. Pursuant to the aforesaid letter dated 15-5-1997 (Annexure-5), the Deputy Secretary (T) of respondent No. 5 submitted his inspection report dated 21-6-1997 (Annexure-7). The same was considered by the Branch Manager, Aurangabad, who approved the same and forwarded it to his Headquarters in Patna, vide his letter dated 15-7-1997 (Annexure-9). The same stated that the unit's capacity utilization was more than 50%. The two reports from the Branch Office were considered by the Corporation's head office and was forwarded to respondent No. 3 as per the Corporation's report dated 11-8-1997 (Annexure-10) along with covering letter dated 13-8-1997. The report stated that there was physical inspection of the unit and the assets created at site by an Engineer of the Corporation and also after verification of the concerned bills and vouchers. Relevant portion of the said report dated 21-6-1997 (Annexure-7) is set out hereinbelow for the facility of quick reference:
"Thus the value of assets available at the said may be considered as under:
Land Lease
Building Rs. 32.80 lacs
Plant & Machineries, Electrical Other Rs. 66.54 lacs
tolls & implements, etc. Photocopies (inclusive of Rs. 5.58 lacs
of bills and vouchers available form on cots of tax freight and
Co. are enclosed herewith for reference. nstallation)
TOTAL : Rs. 99.34 lacs
Paragraph 15 of the Corporation's report (Annexure-10) making the recommendation to the Committee is set out hereinbelow. for the facility of quick reference:
15. Recommendation As per New Industrial Policy A sum of Rs. 7,50,000/- (Rupees Seven Lacs fifty thousand only) is being recommended for sanction of State Capital Subsidy on the basis of actual investment made by the concern towards acquisition of fixed assets at said.
Earlier a sum of Rs. 3,12,750/-(Rupees three lacs twelve thousand seven hundred fifty only) has been sanctioned as State subsidy by the S.L.C. Units meeting held on 23-5-1997.
In substance, the Corporation recommended that the balance of the industrial subsidy, namely, Rs. 4,37,250/- may be disbursed.
6. Without waiting for the report of respondent No. 5, the Committee considered the claims of the petitioner at its meeting held on 23-5-1997, and found that Rs. 20.85 lacs was the amount spent over plant and machinery, 15% of which was Rs. 3,12,750/-, and was sanctioned for release. The discussion and resolution of the Committee as on 23/28-5-1997 is marked Annexure-8 hereof, and was impugned in CWJC No. 9613 of 1997. As is obvious, the State Government had neither the inclination nor perhaps the occasion to consider the aforesaid reports of respondent No. 5 (Annexure-7,9 and 10), because it had already pre-empted the Corporation by passing the final order dated 23-5-1997 (Annexure-8), leading to the second writ petition in this Court bearing CWJC No. 9613 of 1997 for release of the balance of the amount of industrial subsidy, namely, Rs. 4,37,250/-. The same was disposed of by a learned Single Judge of this Court by order dated 27-10-1997 (Annexure-11), with the direction to the State Government to place the petitioner's claim before the Committee after consideration of the aforesaid report dated 13-8-1997 (Annexure-10), and disburse the admissible amount.
7. Accordingly, the petitioner's claim was considered by the Committee at its meeting held on 19/20-12-1997 which submitted its report dated 6-1-1998 (Annexure-12), whereby it reiterated its earlier decision dated 23-5-1997 (Annexure-8), ignoring the recommendation of respondent No. 5 (marked Annexure-10).
8. This led to the third writ petition in this Court bearing CWJC No. 1191 of 1998, which was disposed of by a learned Single Judge of this Court by his order dated 12-3-1999 (Annexure-13), wherein it was held that the industrial unit as per the Policy is entitled to subsidy on the investment made till the date of commercial production, i.e., 10-4-1995, and not that of trial production. Pursuant to the order on CWJC No. 1191 of 1998, the Committee reviewed the matter at its meeting held on 14-8-1999 (Annexure-15), and determined the following amount of investment:
1. Plant/Machinery : 28.04
2. Workshop equipment : 1.636
3. Electrification : 6.94
4. Other head : 11.95
5. Other immovable Property : 2.50 TOTAL : 51.066 The following items of investment were excluded and were not treated to be investment on plant and machinery:
(i) Rs. 2.27 lacs paid by way of taxes on plants and machineries and the installation cost.
(ii) Rs. 1,636 spent for purchase of machine.
(iii) Rs. 21,000/- spent over purchase of two units of 3HP Motor and two units of 1.5 HP Motor was excluded, being electrical items used for motor workshop equipment.
(iv) Rs. 10.50 lacs spent over Alternates Transformer, D.G. Set, OCP, PVC Insulated electrical cable excluded on the ground that the same was not treated to be plant and/or machinery by the relevant circular of the Government of India.
Separate subsidy on D.G. Set is admissible under the Policy.
(v) Rs. 2.50 lacs spent on capital investment was excluded because the same cannot be treated to be plant and macihery.
The Committee, therefore, took the decision to exclude the investment of Rs. 17.116 lakhs. The State level Committee in its report dated 18-8-1999 (Annexure-15) came to the conclusion that the following investment under the head 'Plant and Machinery' were fit to be taken into consideration for determination of the amount of capital subsidy:
(a) Plant/Machinery Rs. 25.77 lacs
(b) Electrification items Rs. 6.73 lacs
(c) Water limpid starter & classic switch Rs. 1.45 lacs
Total : Rs. 33.95 lacs
In other words, 15% of the amount of Rs. 33.95 lacs comes to Rs. 5,09,250/-which was held to be the admissible amount of industrial subsidy, out of which Rs. 1,96,500/- remained unpaid and was decided to be disbursed.
9. The petitioner preferred the fourth writ petition bearing CWJC No. 12096 of 1999 for release of the balance amount of subsidy, namely, Rs. 2,40,750/-. It was observed in the order dated 17-8-2000 (Annexure-16), passed on the writ petition that this Court was unable to appreciate the rationale for exclusion of items like D.G. Sets, purchase of some other equipments, and the taxes paid for purchase of the machinery. Therefore, while keeping the writ petition pending, this Court by the said order dated 17-8-2000 directed the Committee to consider the issues in the light of the Policy and the observations made in that order. Accordingly, the Committee at its meeting held on 7-9-2000 reviewed the matter and rejected the same by its resolution marked Annexure-17 primarily on the ground that the claims had already been rejected by the Committee earlier. However, insofar as D.G. sets are concerned, the Committee stated that there is no provision for industrial subsidy, although there is separate provision in the same Policy to give grant for the same and for which the competent authority was the General Manager or the Managing Director, Industrial Area Development Authority of the area within whose jurisdiction the unit exists. The said reported dated 7-9-2000 (Annexure-17) was considered by this Court in CWJC No. 1096 of 1999. By order dated 15-11-2000 (Annexure-18), the aforesaid letter dated 25-11-1999, and the resolution of the Committee passed on 20-8-1999, which was based on the report dated 14-8-1999, were quashed, the matter was remitted back to the Committee for re-consideration within a period of three months from the date of receipt/production of a copy of the order, after affording opportunity of hearing to the petitioner and to be disposed of with a reasoned order.
10. Consequently, the matter was re-examined by the Committee at its meeting held on 14-6-2001, which submitted its report dated 20-6-2001, and communicated to the petitioner by letter dated 11-7-2001 (Annexure-19), of respondent No. 3, whereby the balance of the petitioner's claim of Rs. 2,40,750/- has been rejected. The same has been assailed in the present writ petition.
11. While assailing the validity of the impugned action, learned Counsel for the petitioner submitted that the impugned order (Annexure-19), suffers from non-application of the mind, is a reproduction of the previous resolution of the Liability Committee dated 14-8-1999 (Annexure-15), which was set aside in CWJC No. 12096 of 1999. He next submitted that the Press Note No. 25 (1989 series), dated 3-2-1990 (Annexure-A to the counter-affidavit), issued by the Government of India, Ministry of Commerce, Department of Industries, is wholly inapplicable to the present case for various reasons. He next submitted that the expression "plant & Machinery" occurring in the Industrial Policy should be given a wide meaning. The Industrial Policy has to be interpreted liberally. He next submitted that the sales tax paid on purchase of plant and machinery cannot be excluded. He relies on the judgment of the Supreme Court State of Bihar v. Suprabhat Steel Limited.
12. Learned Government Pleader No. IV appearing for the State of Bihar and its functionaries (respondent Nos. 1 to 4) submitted that investments till the date of commencement of the commercial production will alone qualify for consideration. He next submitted that as per paragraph-7 of the Industrial Policy, 25% subsidy on purchase of installation of Diesel Generating set is admissible and the appropriate authority for granting the same is different. He submitted that the investment in maintenance equipments have been rightly disallowed as per Clause 3(ii) of the aforesaid circular of the Government of India (Annexure-A). Electrical items for motor workshop which includes maintenance equipment as stated in Clause 3 of the impugned order has been rightly rejected because it is not specifically stated in the Industrial Policy. He lastly submitted that the fixed assets as per Clause 5 of the impugned order has also been rightly rejected.
13. Learned Counsel for respondent No. 5 (Bihar State Financial Corporation) submitted that all investments between the period 1 -4-1993 to 31-3-1998 or up to the date of commencement of commercial production, i.e., 10-4-1995, whichever is earlier, will qualify for consideration. In his submission, the petitioner has not been able to establish that permissible investments were made up to 10-4-1995, the date of commercial production.
14. Having considered the rival submissions, I am of the view that this writ petition has to be allowed. Learned Counsel for the petitioner is right in his submission that the Industrial Policy has to be given a liberal interpretation. The Supreme Court has observed in the case of Bajaj Tempo Ltd. v. Commissioner of Income-Tax , the relevant portion from paragraph 5 of which is set out hereinbelow for the facility of quick reference:
... Since a provision intended for promoting economic growth has to be interpreted liberally, the restriction on it, too, has to be construed so as to advance the objective of the section and not to frustrate it. But, that turned out to be the unattended consequence of construing the clause literally, as was done by the High Court for which it cannot be blamed, as the provision is susceptible of such construction if the purpose behind its enactment, the objective it sought to achieve and the mischief it intended to control is lost sight of....
15. Learned Counsel for the petitioner is right in his submission that the impugned order suffers from lack of genuine application of the mind. It appears to be a mechanical reproduction of the previous resolution of the Liability Committee passed at its meeting dated 18-8-1999 (Annexure-15). The latter same was challenged in this Court in CJWC No. 12096 of 1999. While keeping the writ petition pending, this Court had by its order dated 7-8-2000 (Annexure-16) directed the Liability Committee to reconsider Annexure-15 which was replaced by its resolution dated 7-9-2000 (Annexure-17). The same was set aside by this Court by its final judgment dated 15-11-2000 (Annexure-18), passed on CWJC No. 12096 of 1999, and the matter was remitted to the Committee for fresh judgment. There was no difference in substance between Annexure-15 and Annexure-17. This led to the order dated 14-6-2001 (Annexure-19) and impugned herein. I really regret the determined and purposive approach of respondent Nos. 1 to 4 to reject the claims of the petitioner on untenable grounds giving rise to successive writ petitions in this Court. The same would not have happened if the Committee had adopted a bona fide approach to the matter and showed due defence to the successive orders of this Court.
16. Learned Counsel for the petitioner is further right in his submission that the aforesaid Press Note No. 25, dated 3-2-1990, of the Government of India (Annexure-A to the counter-affidavit of respondent Nos. 1 to 4), could not have been pressed into service by respondent Nos. 1 to 4 in borrowing the definition of plant and machinery from the same, and is wholly inapplicable to the present case for reasons more than one. The object and purpose of Annexure-A is entirely different, namely, the Government of India recognized the growth in the small-scale industries and its contribution to the economy of the country. A small scale industry is one the investment of which on plant and machinery does not exceed to Rs. 35 lacs. Therefore, in order to promote the economic activity in the country by means of small scale industries, Government of India issued the notification taking out many items of investment from the definition of small scale industry so that more and more industries are covered by the expression "small scale industries", entitling them to the benefit of industrial incentive policies of the Government of India, which is intended to give a fillip to the economic and industrial activities in the country, secondly, every enactment or policy has its own definition to serve the aims and object, and it is an unsound and inadvisable rule of construction to borrow the definition from other enactments or circulars or policy decisions. The Supreme Court has observed in its judgment Union of India v. R.C. Jain, paragraph 1 of which is set out hereinbelow for the facility of quick reference:
'Local fund' is again not defined in the General Clauses Act. Though the expression appears to have received treatment in the Fundamental Rules and the Treasury Code, we refrain from borrowing the meaning attributed to the expression in those Rules as it is not a sound rule of interpretation to seek the meaning of words used in an Act, in the definition clause of other statutes. The definition of an expression in one Act must not be imported into another. "It would be a new terror in the construction of Acts of Parliament if we were required to limit a word to an unnatural sense because in some Act which is not incorporated or referred to such an interpretation is given to it for the purposes of that Act alone" (per Loreburn, LC. in Macbeth & Col v.
Chislett 1910 AC 220 : 102 LT 82. For the the same reason, we refrain from borrowing upon the definition of 'local authority' in enactments such as the Cattle Trespass Act, 1871, etc. as the High Court has done.
17. It is thus manifest that different meaning and content is intended for the same expression in different statutes, circulars or policies which will have to be construed in view of the aims, objects and the scheme thereof. Annexure-A has been issued by Government of India and is, therefore, inapplicable to the affairs of the State Government unless the same were duly adopted by it. He has also not been able to explain as to why this circular was ignored by the Committee in the earlier stages.
18. The expression plant and machinery has to be given a wide meaning, as has been held by the Supreme Court in its judgment in the case of Scientific Engineering House v. Commissioner of Income-Tax , paragraphs 11 to 14 of which are relevant in the present context and are set out hereinbelow for the facility of quick reference:
11. Counsel for the assessee urged that the expression 'plant' should be given a very wide meaning and reference was made to a number of decisions for the purpose of showing how quite a variety of articles, objects or things have been held to be 'plant'. But, it is unnecessary to deal with all those cases and a reference to three or four decisions, in our view would suffice. The classic definition of 'plant' was given by Lindley, L.J. in Yarmouth v. France a case in which it was decided that a cart-horse was plant within the meaning of Section 1(1) of Employers' Liability Act, 1880. The relevant passage occurring at page 658 of the Report runs thus :
There is no definition of plant in the Act: but, in its ordinary sense, it includes whatever apparatus is used by a businessman for carrying on his business, not his stock-in-trade which he buys or makes for sale; but all goods and chattels, fixed or movable, live or dead, which he keeps for permanent employment in his business.
In other words, plant would include any article or object fixed or movable, live or dead, used by businessman for carrying on his business and it is not necessarily confined to an apparatus which is used for mechanical operations or processes or is employed in mechanical or industrial business. In order to qualify as plant the article must have some degree of durability, as for instance, in Hinton v. Maden & Ireland Ltd., knives and lasts having an average life of three years used in manufacturing shoes were held to be plant. In CIT v. Taj Mahal Hotel, the respondent, which ran a hotel, installed sanitary and pipeline fittings in one of its branches in respect whereof it claimed development rabate and the question was whether the sanitary and pipeline fittings installed fell within the definition of plant given in Section 10(5) of the 1992 Act which was similar to the definition given in Section 43(3) of the 1961 Act and this Court after approving the definition of plant given by Lindley, L.J. in Yarmough v. Frances, as expounded in Jarrold v. John Good and Sons Ltd., held that sanitary and pipeline fittings fell within the definition of plant.
12. In Inland Revenue Commissioners v. Barclay Curie & Co. Ltd., the House of Lords held that a dry dock since it fulfilled the function of a plant must be held to be a plant. Lord Reid considered the part which a dry dock played in the assessee company's operations and observed:
It seems to me that every part of this dry dock plays an essential part.... The whole dock is, I think, the means by which, or plant with which, the operation is performed.
Lord Guest indicated a functional test in these words:
In order to decide whether a particular subject is an 'apparatus' it seems obvious that an inquiry has to be made as to what operation it performs. The functional test is, therefore, essential at any rate as a preliminary.
In other words, the test would be : Does the article fulfil the function of a plant in the assesse's trading activity? Is it a tool of his trade with which he carries on his business? If the answer is in the affirmative it will be a plant.
13. If the aforesaid test is applied to the drawings, designs, charts, plans, processing data and other literature comprised in the 'documentation service" as specified in Clause 3 of the agreement it will be difficult to resist the conclusion that these documents as constituting a book would fall within the definition of 'plant'. It cannot be disputed that these documents regarded collectively will have to be treated as a 'book', for, the dictionary meaning of that word is nothing but "a number of sheets of paper, parchment, etc. with writing or printing on them, fastened together along one edge, usually between protective covers; literary or scientific work, anthology, etc. distinguished by length and form a magazine, tract, etc. "(vide Webster's New World Dictionary). But, apart from its physical form the question is whether these documents satisfy the functional test indicated above. Obviously the purpose of rendering such documentation service by supplying these documents to the assessee was to enable it to undertake its trading activity of manufacturing the odolities and microscopes and there can be no doubt that these documents had a vital function to perform in the manufacture of these instruments; in fact, it is with the aid of these complete and up-to-date sets of documents that the assessee was able to commence its manufacturing activity and these documents really formed the basis of the business of manufacturing the instruments in question. True, by themselves these documents did not perform any mechanical operations or processes but that cannot militate against their being a plant since they were in a sense the basic tools of the assessee's trade having a fairty enduring utility, though owing to technological advances they might or would in course of time become obsolete. We are, therefore, clearly of the view that the capital asset acquired by the assessee, namely, the technical know-how in the shape of drawings, designs, charts, plans, processing data and other literature falls within the definition of 'plant' and therefore, a depreciable asset.
14. Counsel invited our attention to the decision in CIT v. Elecon Engineering Co. Ltd., where the Gujarat High Court has, after exhaustively reviewing the case law on the topic, held that drawings and patterns which constitute know-how and are fundamental to the assessee's manufacturing business are 'plant'. We agree and approve the said view.
19. The judgment of the Supreme Court in the case of Commissioner of Income-Tax v. Mir Mohd. A AIR 1964 SC 1693, is to the same effect. Paragraphs 13 and 14 of the same are relevant in the present context and are set out hereinbelow for the facility of quick reference:
13. What then is the test for determining whether a mechanical contrivance is machinery for the purposes of second para of Clause (vi) and Clause (via)? The Privy Council in the case of ILR 49 Cal 190: (AIR 1992 PG 27) hazarded the following definition of' machinery'.
The word 'machinery' when used in ordinary language prima facie, means some mechanical contrivances which, by themselves or in combination with one or more other mechanical contrivances, by the combined movement and inter-dependent operation of their respective parts generate power, or evoke, modify, apply or direct natural forces with the object in each case of effecting so definite and specific a result.
They had already observed that the word 'machinery' must mean more than a collection of ordinary tools. The Privy Council case was not a tax case but prima facie the ordinary meaning of the word 'machinery' and the word 'machinery' is an ordinary and not a technical word must, unless there is something in the context, prevail in the Indian Income-Tax Act also.
14. According to the above definition, a diesel engine is clearly 'machinery'. Indeed R. 8 of the Income-Tax Rules treats aero-engines separately from aircraft. It is true that this rule cannot be used to interpret the clauses in the Act but, it does show that components of an aircraft, which are machinery, can be treated separately.
18. It is thus manifest from the judgments of high authority that 'plant and machinery' has to be given a wide meaning and in its ordinary sense should include whatever apparatus is used by a businessman for carrying on his business unless restricted by the terms of the Statute or the Policy. Plant includes any article or object fixed or movable, live or dead, used by businessman for carrying on his business and is not confined to mechanical operations or processes. It should have some degree of durability, for example, knives and lasts used for manufacturing shoes. A pucca structure like a dry dock which performs part or whole of the operation held to be plant. In other words, all tools of the trade which helps the businessman or the manufacturer in any way in completing the activity is plant. The Supreme Court has gone to the extent of stating that the drawings and patterns which constitute know-how and are fundamental to the manufacturing business are plant'. However, the stock-in-trade which he buys or sells will have to be excluded.
21. Learned Counsel for the petitioner is further right in his submission that all taxes are part of the sale price. There cannot be purchase of plant and machinery without paying the statutory amount of sales tax or any such compulsory exaction. The same, therefore, cannot be excluded unless there is a clear provision to that effect in the Statute or the Policy. However, the judgment relied on by the learned Counsel for the petitioner in the case of State of Binar v. Suprabhat Steel Limited is inapplicable to the facts and circumstances of the present case, inasmuch the Supreme Court was considering the scope and entitlement of the industries covered by the Bihar Industrial Incentive Policy, 1993, whereby there was sales-tax exemption on the units starting production as per the terms of the policy whereas the Industrial Policy in the present case is to go give financial benefit on its investment between the prescribed period. The scope, purpose and the benefits to be conferred by that policy were entirely different.
22. I must at this stage deal with the contentions advanced on behalf of the learned Government Pleader that the items specifically excluded by the terms of the Industrial Policy had to be excluded. Relying on paragraph 7 of the Policy he submitted that the investment in Diesel Generating sets has to be excluded. In order to appreciate his submission, paragraph 7 of the Industrial Policy is set out hereinbelow for the facility of quick reference:
7. SUBSIDY FOR PURCHASE AND INSTALLATION OF DIESEL GENERATING SETS:
(I) Industrial units coming into production between 1-4-1993 and 31-3-1998 (with investment up to 15 crores on machinery & plants) will get 25% subsidy on purchase and installation of Diesel Generating sets. However, the maximum limit of the subsidy for this purpose, is Rs. 7.50 lakh. If any industrial unit which has not availed of the subsidy for the purchase of Diesel Generating sets, shall be entitled for the prescribed subsidy for the purchase of Diesel Generating Sets after expansion/diversification.
(ii) Industries mentioned in Annexure-lll will not be entitled for this subsidy.
(iii) The entrepreneurs will be allowed to use D.G. sets without any restriction.
(iv) The entrepreneurs desirous of using D.G. Sets along with the power connection or after the termination of power connection will be required only to inform the Bihar State Electricity Board.
Amendment to this effect in the Electricity Act/Rules will be done by the Deptt. of Energy, Government of Bihar.
There cannot be any quarrel with the principle of law enunciated by the learned Government Pleader but the same on a proper interpretation of Clause 7 does not tend to exclude D.G. sets in the present context. On the contrary, paragraph 7 states that 25% subsidy on purchase and installation of D.G. sets is admissible, i.e., the subsidy on this item is at a higher rate. The same has been rejected by the impugned order on the ground that the authorities to grant the same are different functionaries of the State Government and the petitioner is free to apply for the same before them. I am unable to accede to the same for the reason that this stand was not taken by the State Government earlier. Secondly, the State of Bihar and all its functionaries are represented before this Court. Thirdly, the State Level Committee is entitled to administer the provisions of the entire industrial policy which would include the issue of subsidy on the O.G. sets also which is part of the Policy in question. The factum and the amount of investment on the same is beyond dispute. In that view of the matter, this Court is in no doubt that the subsidy on purchase and installation of D.G. sets has to be calculated in favour of the petitioner.
23. I must deal with the contentions advanced on behalf of both the sets of respondents that the investment on plant and machinery till the date of commercial production, i.e., 10-4-1995 alone qualifies for exemption, and the petitioner has not been able to establish that all its investments were prior to the date of commercial production. The contention is stated only to be rejected. All the four writ petitions up to CWJC No. 12096 of 1996 have proceeded on the footing that the entire investments have been made by the petitioner up to the date of commencement of commercial production. In fact, this aspect of the matter was fully examined by the Corporation and have certified in their reports marked Annexure-7, 9 and 10 that the entire investments of the petitioner were prior to 10-4-1995. The respondents cannot be permitted to raise this objection at this stage which is entirely frivolous, and really the ingenuity of the Counsel. The tenor of various reports of respondent Nos. 1 to 4, which were based on local inspection of plant and machinery and perusal of vouchers, is that the investments on plant and machinery were till the date of commencement of commercial production. This position was never disputed in the resolutions of the Liability Committee so far.
24. In that view of the matter, I have no manner of doubt that the impugned order is bad in law and is fit to be set aside. Accordingly, the following items of investment are covered by the expression 'plant and machinery' occurring in the Policy and, therefore, the same have to be taken into account for granting the industrial subsidy to the petitioner:
(i) The amount spent on tax and freight.
(ii) The installation cost of the plant and machinery.
(iii) All electrical items, including investment on KVA Alternator. Transformer, KVA D.G. Sets, OCB PVC insulated cable.
(iv) Investment over Diesel Generating set(s) is admissible to the petitioner and has to be computed as per Clause 7 of the Policy.
(v) All other items of investment covered by the definition of 'Plant & Machinery' and explained hereinabove.
25. It the result, this writ petition is allowed with costs quantified at Rs. 10,000/-which should be paid along with the industrial subsidy found admissible by this judgment. The Industrial Development Commissioner, Government of Bihar, is hereby directed to ensure release of the industrial subsidy along with interest at the same rate as is being charged by respondent No. 5 from the petitioner, with effect from 10-4-1995 till the date of release. I am supported by a Division Bench judgment of this Court reported in 1992(1) PLJR 700 (Om Flour Mills (P.) Ltd. v. State of Bihar), and followed by me in the case of Hindeutsch Impex Pvt. Ltd. v. State of Bihar and Ors. 2000(2) PLJR 140.
26. Before I part with this judgment, I must record my extrem sense of displeasure over the manner in which the State of Bihar and its functionaries have treated the issue as well as the judgments of this Court. Promotion of the industrial climate, and generation of employment opportunities, is one of the most important and prime concern of the Government. The State Government and its functionaries have completely failed to realise that the units like the petitioner company are the centers of production which generate the wealth and employment opportunities in this State. I fail in my words to record my feeling of revulsion at the conduct and approach of the functionaries of the State Government. Every possible effort at every stage was made by them to deprive the petitioner of the benefit. Is this the way the State of Bihar is being administered without any accountability on the part of its functionaries. It appears to me that the way the State Government is administering its diverse industrial policies, giving rise to most unwanted and repetitive litigations in this Court, it should reconsider their continuance. In that view of the matter, the Chief Secretary to the Government of Bihar is hereby directed to place this judgment before the Chief Minister of the State.